June 19, 2024

How much can you earn on trading to a novice investor. Part 101. Trading (continued)

How much can you earn on trading to a novice investor. Part 101. Trading (continued)

We continue the series of publications about trading in order to understand in practice how much you can earnnovice investor using only forecastspublished on our website. To understand how useful they are, we decided to conduct an experiment and simulate a situation in which a person who knows about trading only what you need to “buy cheaper and sell more expensive”, tries to get additional income in his spare time by investing part of his money in cryptocurrency trading

Since last week we have been out of the market andmonitored the fall in the price of Litecoin. On March 1, the fall stopped at the low point of 56.21 USDT. According to ForkNews forecasts dated 03/02/2020, the pair may soon recover to the resistance area of ​​64.00 USD. 

To do this, buyers need to gain a foothold at the levelaverage prices (60.67 USDT).  At the time of writing, the price is consolidating just above the hourly EMA55. Relying on the forecast, we assume that today there will be a re-test of the level of 64.00 USDT. In order to minimize risks and increase potential income, it would be correct to go long from 60.00 USDT with a very short stop, immediately after the 78.6% fibonacci support (presumably at the level of 59.00 USDT).  

However, we have already run into problems more than oncesituations when, before a bullish breakout, market makers first lowered the price below the support level, knocking long traders out of the position, and then the price rapidly rose. Therefore, taking into account such traps, it would be necessary to lower the Stop Loss level to 58.00 USDT. A price fall below this level may completely cancel the rise to resistance 64.00 USDT. 

Of course, such a low Stop Loss level makes our trade less attractive in terms of risk/reward ratio, but we will try to stick with this option. 

While we were describing the trading plan, our order to buy 3 LTC at the rate of 60.00 USDT was executed. 

How much can you earn on trading to a novice investor. Part 101. Trading (continued)

Now we can only observe the market movement and record the result of a trade transaction, which we will discuss in our next publication.